MoneyPolitics

Households to recieve £350 to soften the blow of a 54% energy price increase set to hit in April

Rishi Sunak has unveiled a series of policies aimed at helping households with the cost of living crisis.

A one-off discount of £200 will be given to every home to help mitigate the worst of the £693 rise in energy bills announced by the regulator Ofgem on Tuesday morning.

Around 80% of all households will also be given a £150 council tax rebate, meaning a total of £350 is available in Government support – at a cost of £9 billion.

Energy suppliers will apply the discount on people’s bills from October with the Government meeting the cost in full, the chancellor told MPs.

But it will have to be automatically repaid from people’s bills in £40 instalments over five years from 2023.

The council tax rebate won’t need to be paid back and Mr Sunak stressed it will go to people on middle incomes as well as the poorest because ‘a lot of people are struggling right now.’

Everyone who lives in council tax bands A to D will qualify, meaning four fifths of all homes will get the money.

The chancellor told MPs: ‘The price cap has meant that the impact of soaring gas prices has so far fallen predominantly on energy companies, so much so that some suppliers who could not afford to meet those extra costs have gone out of business as a result.

‘It is not sustainable to keep holding the price of energy artificially low. For me to stand here and pretend we don’t have to adjust to paying higher prices would be wrong and dishonest.

‘But what we can do is take the sting out of a significant price shock for millions of families by making sure the increase in prices is smaller initially and spread over a longer period.’

Energy bills are set to soar for the average household after Ofgem increased the price cap by 54% to £1,971.

The huge rise was the latest blow to hit cash-strapped families, who are already having to deal with the increased cost of staples such as food and fuel.

The chancellor has been forced to act after months of concerns about the effect of the rising cost of living.

Back to top button